Weeks after the government offered conciliation to settle the long-pending tax dispute with it,Vodafone India Chairman Analjit Singh today said the company is keen to reach an amicable settlement of the matter.
“I hope to meet the (Finance Minister) again early next week… Vodafone is highly desirous and keen to settle the tax matter,” Singh said. He was speaking to reporters after his meeting with the Finance Minister.
This is the first time that a top official from Vodafone has met Finance Minister P Chidambaram,after the government decided to settle the Rs 11,217 crore tax issue through conciliation.
While Vodafone had shown keenness to go in for conciliation under the United Nations Commission on International Trade Law (UNCITRAL) law,India has proposed settlement under the Indian Arbitration and Conciliation Act.
Vodafone’s reply to the government on the issue was not satisfactory as they were nitpicking on things like venue and rules for conciliation,according to government functionaries,who said it was for Vodafone to show greater alacrity and enthusiasm to resolve the tax dispute.
Vodafone is facing tax liability of over Rs 11,200 crore,along with interest,on its 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar.
The Supreme Court last year had ruled in Vodafone’s favour,saying the British company was not liable to pay any tax over its 2007 acquisition of mobile phone assets in India.
The government later that year changed the rules to enable it to make retroactive tax claims on already-concluded deals,drawing criticism from global business groups.
Following that,the Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay tax demand of about Rs 11,217 crore along with interest.
However,Vodafone replied saying that they do not owe anything to the Indian Government. Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.